Stanza 2 Summary

Get out the microscope, because we’re going through this poem line-by-line.

He'd a French cocked-hat on his forehead, a bunch of lace at his chin,
A coat of the claret velvet, and breeches of brown doe-skin;

This highwayman is a snappy dresser. He's got a French hat on, and a bunch of lace tucked into the top of his shirt.
His coat is made of velvet and it's claret-colored (that's a deep red wine color).
His breeches (pants) are made of doe skin (really soft leather made from deer hide).

They fitted with never a wrinkle: his boots were up to the thigh.

Apparently the pants fit tight, with no wrinkles, and his boots are thigh high.
Now if a man today tried to impress the ladies by wearing thigh high boots and tight pants and lace, it probably wouldn't work out so well. Let's just take it for granted that this kind of stuff used to be considered studly.
Plus these clothes give us a little hint of when this poem was set. We'd guess that it takes place some time in the eighteenth century, but definitely a long time before it was written (in 1906).

And he rode with a jeweled twinkle,
His pistol butts a-twinkle,
His rapier hilt a-twinkle, under the jeweled sky.

This guy is dressed up so fancily that he seems to twinkle like a jewel.
These lines also let us know that he's heavily armed, with pistols and a rapier (a long thin sword).
Plus the sky is "jeweled" too. Everything in this stanza is glittering with beauty and excitement.